Credit tier?

Dealer friends - is it even possible and at what rates for me to be able to get a BMW with a low 600 beacon?

Also, do any of you recommend the BMW select program where you basically have the balloon payment at the end?

I think you should go to a dealer and let them put an application with BMWFS. Don't apply online.

Originally Posted by seltzer

Dealer friends - is it even possible and at what rates for me to be able to get a BMW with a low 600 beacon?

Also, do any of you recommend the BMW select program where you basically have the balloon payment at the end?

My understanding is promotional rates require minimum of 670 score. Anything below that will get tiered rates and not promotional rates. Just a friendly FYI. I think you can still get a BMW with low 600 score, but you will be charged substantially more money ratewise as a result. On the select issue my advice is that it is generally a bad idea. I equate select financing with those negative amortization loans that were so popular about 4-5 years ago and we all know where that got everyone. It is a risk since you have no idea what the value of the car will be 3-5 years from now and you may be upside down at the end of the ballon period. If this happens you are faced with two choice with the first being to pay out of pocket to sell the car or be forced to refinance at high rates (no one is going to give good rates on a 3-5 year old car without CPO rate support). Also, the amount of miles driven and the type of vehicle purchased will have a great impact on the upside down situation. I advise you lease for 36 months rather than do select financing because there is no risk.

Thank you for the responses. I am anxious to see how this plays out. I will have to give it some thought.

Select is only good when the interest rates are low.

best to go to a trusted dealer. it's not all about score, although you will pay more. i had a 760 or something a couple of years ago but because i'd always paid cash for my cars, i had no recent "big asset" experience. they rejected me. and yet a friend just got approved for a lease with a 650, with a successful BMW lease record behind him. (ps that produced a money factor increase of .0002. not crazy.)

Thanks appreciate all the advice

The only way to make a BMW Select work for you is to make a point of either paying more every month or making a few extra lump sum payments. That way you are not committed to a larger payment every month, but still pay down the loan and are not facing a huge balloon payment.

Here's the difference between Select and regular Finance:

Finance payments include finance charges and paying off entire principal amount

Select payments include finance changes on ENTIRE finance amount and paying off principal amount selected (residual will not be paid off until you refinance or pay off balance in cash/trade in at end)

There is nothing evil about Select. In fact, I rather like it and recommend it. But, I go a step further... just like in a lease you can choose to use a LOWER residual (just not a higher one). Say for instance for a 2011 328xi the posted balloon residual is $17K based on the MSRP of your particular car and you feel based on the mileage and way that you drive, your car will only be worth about $14K at the end of the payment period then, make your balloon $14K. This way there is no danger in negative equity.

NOTE: This is nothing like a negative amortization loan (where you pay less than what's required to lower the principal balance for a specified period of time with the bank's permission).

BMW Select is a more customizable finance program. They are perfect for residents straight out of med school where it takes 3-5 years to break the $100K pay barrier and you could use lower payments up front and any other occupations like that. It also great for ANYONE else as long as you understand how it works and it makes sense for you financially.

Quite a few supercars are purchased with balloon loans because it's easier to afford a $2,300/mo car payment then a $3,000/mo one

To get a lower residual you would need to put more down on the car though and some may be gambling on the idea that they will have more $$ available at the end of the payment period.

Originally Posted by judyg951

To get a lower residual you would need to put more down on the car though and some may be gambling on the idea that they will have more $$ available at the end of the payment period.

no, you could also just pay a higher payment each month and keep the same down payment.

Originally Posted by SARAFIL

no, you could also just pay a higher payment each month and keep the same down payment.

That is true, but the Op wanted a low payment.

Originally Posted by judyg951

That is true, but the Op wanted a low payment.

True, but a Select with a "more reasonable" (read: lower) balloon amount could still result in a noticeably lower payment than traditional financing and would make it less likely that he'd be upside down at the end of the term, which I think is one of the biggest issues with a Select. It also reduces the amount of interest he pays over the term.

Both of my sons are in BMW select purchased vehicles and they are both upside down. They are in year 3 of a 4 or 5 year term though and hopefully will even out by the time the end of the loan is due.

have you thought about trying to improve your credit score? i mean if i were in your shoes and trying to get a bmw with a score like that i would definatly focus on paying off any large balances or sending letters to creditors asking to remove late payments(this works more often then one thinks even if you have made late payments).

Here's my 2 cents worth, I don't think owning a BMW makes sense. I've looked at this seven ways from Sunday. Leasing a new one every three years with a good lease deal is not much more and events could make it much less than owning. The big reasons are you are driving new cars, you are not paying maintenance, and you are not worried about resale value. BMWs have tended to be worth less than lease residuals, much less in '08, and you're always going to get hurt trading in a car unless you become an amateur car salesman and sell it yourself but there are all kinds of potential problems doing that. Mileage and cars in general tend to get better over time. If you lease you're driving these better cars.